IRS Form 4070A: The Complete Guide for Tipped Workers

What Is IRS Form 4070A?

IRS Form 4070A is a daily tip record worksheet that tipped employees are required to maintain under the Internal Revenue Code. Formally titled "Employee's Daily Record of Tips," Form 4070A is published in IRS Publication 1244 and documents the cash tips, charged tips, and tip-outs a worker receives on each working day. The IRS requires all employees who receive $20 or more in tips during any single calendar month to report those tips to their employer using this form or an equivalent daily record.

The form captures: employee name and address, employer name and address, the period covered (month), and the amount of tips received each day. It is the standard documentation format that employers, tax preparers, mortgage lenders, and landlords recognize as proof of tip income.

Who Is Required to Use Form 4070A?

Any employee who receives tips as part of their job and earns $20 or more in tips in a calendar month must keep a daily tip record and report those tips to their employer. This requirement applies to:

• Servers and food-service workers
• Bartenders
• Barbers and cosmetologists who receive tips from clients
• Valets and parking attendants
• Hotel bellhops and concierge staff
• Taxi and rideshare drivers who receive cash tips
• Casino dealers who receive tips from players
• Any worker in a tipped occupation where cash exchanges hands

The $20/month threshold is low by design. For most tipped workers, every working month qualifies. Even workers who earn tips irregularly (seasonal staff, part-time workers, booth renters) must keep records in any month where tips reach $20.

The Reporting Deadline

Tips must be reported to your employer by the 10th day of the month following the month the tips were received. For example, tips earned in January must be reported to your employer by February 10th.

If the 10th falls on a Saturday, Sunday, or legal holiday, the deadline moves to the next business day.

Employers use the reported tip amounts to withhold the correct amount of income tax, Social Security tax, and Medicare tax. If you do not report tips to your employer, you are still responsible for paying the taxes yourself when you file your annual return, plus potential penalties.

What Counts as a Tip?

The IRS defines tips broadly. The following must all be recorded on Form 4070A:

• Cash tips: Money given directly by customers, including cash left on a table or handed directly to you.
• Charged tips: Tips added to a credit card, debit card, or check by a customer. (Your employer may distribute these to you through payroll.)
• Tip-outs: Tips received from other employees through tip pooling or tip sharing arrangements (e.g., a server receiving a portion of tips from a bartender's pool).

Tips paid out to other employees through tip sharing are subtracted from your total. Form 4070A has a field for this: "Tips paid out to other employees."

What Happens If You Don't Report Tips?

Failing to report tips to your employer has tax and legal consequences:

• Penalty of 50%: Under IRC § 6652(b), failing to report tips subjects you to a penalty equal to 50% of the Social Security and Medicare taxes owed on the unreported tips.
• Back taxes plus interest: The IRS can assess the full Social Security, Medicare, and income taxes on unreported tip income, plus interest from the date they were due.
• No income documentation: Without Form 4070A records, you have no proof of tip income for mortgage applications, apartment rentals, or business loan applications. Cash income that isn't documented doesn't exist to a lender.
• Audit exposure: The IRS uses tip income data from Form 8027 (filed by employers) to assess whether reported tip income is consistent with what's expected for a given establishment. Under-reporters are a known audit target.

How to Complete Form 4070A

Form 4070A is a monthly worksheet. Each row represents one working day. The fields are:

1. Date: The date of the shift (not the date you're filling it in).
2. Establishment name and address: Your employer's business name and address. Must match what's on your W-2 and what your employer files on Form 8027.
3. Tips received directly from customers: The total of all cash and charged tips you personally received from customers that day.
4. Tips received from other employees: Any tip pool distributions you received from coworkers.
5. Tips paid out to other employees: Any tips you paid out through tip sharing.
6. Net tips: Line 3 plus line 4 minus line 5. This is what you actually kept.

At the end of the month, you total the net tips column, sign the form, and submit it to your employer. Keep a copy for your own records.

Why Lenders and Landlords Accept Form 4070A

Most lenders and landlords understand that tipped workers earn substantial income that doesn't appear on a W-2 or pay stub. Form 4070A, especially a consistent 12-month history, gives them a documented, dated record of cash income by employer.

A server earning $60,000/year in tips has a W-2 showing only their base hourly wage, often $2.13/hour at the federal tipped minimum wage. Without a tip record, they cannot qualify for a mortgage that reflects their actual income. With 12 months of Form 4070A records plus a simple income summary letter, they can document total compensation to any standard lender.

For mortgage applications specifically, lenders typically want 24 months of tip income history and may average the two years. Keeping consistent records starting today protects your options two years from now.

How TipFolio Generates Form 4070A Automatically

TipFolio is a mobile app built specifically around the Form 4070A workflow. After each shift, you log your tips in about 10 seconds using the large number pad. At the end of the month, TipFolio generates a pre-filled Form 4070A PDF (employer name, establishment address, dates, daily amounts, and totals) exactly as the IRS format requires.

The same tip history automatically generates a loan-ready income letter: monthly average tip income, annualized total, by employer. The letter is formatted for mortgage officers and landlords who need documentation they can put in a file.

All data is stored on your device by default. No Wi-Fi needed to log shifts. No account required for basic logging. Pro ($39.99/year, or $99.99 once for lifetime) adds PDF export, income letters, unlimited history, and CSV export for accountants.

Download TipFolio for iOS and Android.

Frequently Asked Questions

Do I need to keep Form 4070A if my employer tracks tips automatically?

Yes. Even if your employer's POS system tracks credit card tips, you are still responsible for maintaining your own daily record of all tips, including cash tips, which the POS system doesn't capture. The IRS requires you to keep records sufficient to support the amounts you report.

How long should I keep my tip records?

The IRS generally recommends keeping tax records for at least 3 years from the date you filed the return. For tip income, especially if you're planning a mortgage application, keeping records for at least 2–3 years is advisable.

What if I work for multiple employers in the same month?

You need a separate Form 4070A for each employer. Each form must include that employer's name and address. The $20 threshold applies to each employer separately. TipFolio supports multi-employer logging in the Pro plan.

What is the difference between Form 4070A and Form 4070?

Form 4070A is your personal daily record, the worksheet you fill in and keep (or submit to your employer). Form 4070 is the formal monthly report you submit to your employer, summarizing the totals from your Form 4070A. In practice, many employers accept Form 4070A directly as the report. Both forms are in IRS Publication 1244.

Does TipFolio constitute tax advice?

No. TipFolio is a recordkeeping tool, not a tax advisor. The information in this guide is for general informational purposes only. For questions specific to your tax situation, consult a licensed tax professional or visit IRS.gov.